Que - nothing will happen with regards to Kyoto in Canada other than cosmetic actions. Just watch. The whole concept of going back to emission levels of the 1990s is patently absurd. Kyoto is a political cannard.
Now look at this one!
U.S. Re-Explores Oil Shale Options
by John J. Fialka
Fri, Mar 11, 2005 21:35 GMT
UINTAH COUNTY, Utah - Rising oil prices have sparked new U.S.
government and corporate interest in developing oil shale, a
tantalizingly plentiful but difficult-to-access resource largely
abandoned after oil prices crashed in the early 1980s.
The Pentagon is working on plans to direct, within four years, a
portion of its $5.5 billion (4.1 billion euros) fuel-purchasing
budget for high-quality oil, extracted from sedimentary-rock
formations called shale, here and in the surrounding region. The move
is designed to catalyze a new industry that can supply the military
with oil from untapped domestic sources, according to a Defense
Department official.
The Interior Department, meanwhile, soon will lease tracts of land in
the western U.S. for research and development of oil shale --
something it hasn't done since the 1970s. Officials have received
positive comments from independent producers and two big oil
companies, Royal Dutch/Shell Group and Exxon Mobil Corp.
Shell has informed the Interior Department it has spent "many tens of
millions of dollars" on field research for a new development process
and plans to start a U.S. research project by year-end. Shell said in
a filing with the Interior Department that the U.S. should designate
oil from shale as a "strategically important domestic fuel that
should be developed on an accelerated basis." The company isn't
seeking government assistance but would like the government to
elevate oil shale on its energy-priority list. Shell also announced
in January that it was working with China's Jilin province to develop
oil-shale deposits there.
With an estimated two trillion barrels of shale oil under U.S. soil --
roughly 60% of the world's known deposits -- successful development
would, at least on paper, begin to change the international oil
business. The U.S. would become the world's single biggest oil
source, far surpassing Saudi Arabia's proven reserves of 261 billion
barrels.
As oil prices head toward the $60-a-barrel mark and uncertainty hangs
over the Middle East and other major suppliers such as Venezuela and
Russia, there is renewed interest in so-called unconventional
hydrocarbons: Fossil fuels that can't be extracted using traditional
methods. Canada, the world leader, now pumps more than a million
barrels of oil a day from tar-sand formations in Alberta -- selling
95% to the U.S.
"We are going back, looking at the old reports and reanalyzing old
samples -- we're confident you can make a quality jet fuel from
shale," said Theodore K. Barna, who heads a team of Pentagon fuel
experts, in a recent interview. "We'll be using our domestic
potential to produce petroleum and keeping the money here in this
country."
Widespread development of U.S. oil shale is far from certain. The
complex process of removing energy from rocks remains much more
expensive than conventional drilling for oil and would be viable only
if oil prices remain high. "The magic number for all of this seems to
be about $30 a barrel," said Mr. Barna, a deputy assistant
undersecretary who tracks advanced nuclear, biological and chemical
technology developments in the office of Defense Secretary Donald
Rumsfeld.
Many producers and investors are wary, after about $5 billion of
losses in shale investments two decades ago when the most recent
government-industry effort to produce oil from shale collapsed. Oil
prices defied predictions of hitting $100 a barrel and instead dived
as low as $10. In Rifle, Colorado, people still talk about "Black
Sunday" -- May 2, 1982, when Exxon announced it was abandoning its
nearby shale mine. That ended hundreds of jobs, crashed local real-
estate values and killed many small businesses. In 1985, after
raising big economic hopes here in Uintah County, three other big oil
companies abandoned a $150 million shale mine, failing to produce a
single drop of oil.
"We don't want to create a boom expectation when we're not ready for
that yet," said Terry O'Connor, a vice president at Shell's
exploration-and-production subsidiary in Houston, as he toured his
snow-covered research center in western Colorado, where Shell has 16
oil-shale wells in operation. He told a local business group this
year that his company is "moving forward in a cautious but
increasingly optimistic manner" toward a decision to build a 1,000-
barrel-a-day pilot facility.
Oil shale is found in this remote part of Utah amid the remnants of a
thick layer of sediment including algae and plants that accumulated
on ancient lake beds. Over millions of years the sediment was
compressed into clay-like formations that contain kerogen, a high-
quality oil, comparable in quality to "sweet" crude. There are two
ways to extract the fuel. One is to mine the rock containing it, then
to crush the rock and heat it in giant retorts, or vessels, that trap
the oil. A second method -- under research by both Shell and Exxon
Mobil -- heats the rock while it still is in the ground and then
pumps the kerogen out.
There is no serious talk about offering direct government subsidies
or tax credits for shale, the way former U.S. President Jimmy Carter
did amid the oil crisis of the late 1970s. The closest step to
industrial policy now is through the Pentagon fuel program, which
buys 300,000 barrels of oil a day. Mr. Barna says the military will
declare that a certain, as yet unspecified, portion of that spending
will be earmarked starting in 2009 for fuel specifications that match
oil shale and other unconventional domestic sources such as oil made
from coal.
The world's richest source of oil shale is called the Green River
Formation, 16,500 square miles (42,900 square kilometers) of deposits
beneath parts of Colorado, Utah and Wyoming. The most productive part
of that is the "Mahogany Zone," a layer of rock that runs through it.
The owner of 80% of the resource is the Interior Department, which
became the caretaker after Congress zeroed out the Energy
Department's shale program in 1985.
© 2005 Dow Jones Newswires. |
